Demand has exceeded expectations potentially due to restocking and early seasonal peaks. Also, ships are taking longer voyages, absorbing vessel and container capacity. Eastern Mediterranean ports are inaccessible via Suez, so goods unload at western ports like Barcelona first, causing delays. Containers are also stuck in structural surplus countries like Russia where imports have boomed since 2022.
Consequently, equipment is not returning to China as quickly as expected, limiting liners’ capacity utilization and giving them pricing power. For example, most Shanghai carriers reportedly lack empty containers.
When rates dropped earlier, carriers cut surplus boxes to match lower demand and avoid storage fees on unused equipment. Meanwhile, container production last year fell to its lowest since 2016 as per maritime consultancy Drewry.
The good news is Chinese manufacturers who produce almost all the world’s containers are rapidly scaling up output again. Early 2023 figures match early 2021 highs. Although order lead times are typically just months, most factories are booked for large orders until late summer as per Drewry.
According to Bloomberg, nonetheless prices for 40-foot “high cube” containers in China have recently spiked to as much as $3,350 as per online logistics platform Container xChange, still below 2021 peaks but almost double last September’s average.
